Reports of the death of the branch have been greatly exaggerated; or, at the very least, misunderstood.

“We see research showing the consumers still want branches,” said John Mathes, director of brand strategy at Weber Marketing Group, a Seattle-based brand strategy firm. “Whether they use them or not, there is something psychological and intangible about having a branch nearby where they can go in, look across the table at someone and get advice in person.”

He added, “On some level, consumers think that is where their money is and when selecting their financial provider, having a brick and mortar is a determining factor across all generations – including Millennials.”

It's more that the business model is evolving as branches transform from a transactional channel into a relationship channel, Mathes explained.

“The idea of wanting one-size-fits all for efficiency is the old branch network model,” he said. “Now, every branch should be localized and adjusted for the location and footprint. It's important to bring in some flavor and fabric of the community and surrounding environment.”

It's what the $93 million Portland, Ore.-based Trailhead Credit Union has been doing effectively since its name change from Northwest Resource Federal Credit Union in June 2013. Living its tagline of “Small Enough to Know Better,” the credit union has been using its smaller size as a competitive advantage.

Trailhead's unique branch atmosphere is shown in the photo above.

“We think of ourselves as more of a financial boutique,” said Kim Faucher, Trailhead vice president of marketing. “We were one of 10 with Northwest in the name and we knew if we wanted to grow it had to be more distinctive.”

Working with Weber Marketing Group to develop its brand strategy and new name, the credit union discovered its anti-corporate culture and deep local roots make it the perfect banking alternative for locals who are also proud of their uniqueness.

“The new name was short, easy to pronounce and has that distinct Portland vibe so we're saying Northwest without using the actual word,” said Faucher. “Our brand is going after the younger anti-corporate, hyper-local Portlanders and positioning ourselves as being more liberal.”

For GTE Financial, community financial centers are all about educating members and deepening relationships. The tech part is just another tool used to help accomplish that.

Embracing and welcoming employees and members alike with tattoos and piercings, Faucher said Trailhead has established itself as a very local Portland institution rather than a big corporate identity.

“We always had the culture but it was not as obvious under the old name so we decided to really own it,” she said. “It's worked well and has been amazing to see the difference. We had seven years of negative member growth and now we've experienced 4% growth since June 2013.”

Read more: Trailhead branches out into hipster 'hoods …

While Trailhead's main facility got a facelift, when it was time to branch out, the credit union took advantage of the opportunity to play up its role as another local small business in the form of a 980 square-foot storefront branch, pictured at left.

The area has a lot of bike and foot traffic in a neighborhood filled with lots of locally-owned shops, restaurants, cafes and studios, Faucher said.

Trailhead is also the first and only financial institution within a mile of the eclectic urban neighborhood, she noted. With its reclaimed wood accents from the neighborhood Rebuilding Center, a Little Free Library, where neighbors share their favorite books, and a community calendar chalkboard of local events, the full-service branch fits in well, said Faucher.

“We kind of wanted the branch to look like a coffee house instead of a financial institution and many have been shocked to see it's a credit union,” she said. “We have a glass garage type door we keep open when it's warm, open beam ceilings, cement floors and our staff dresses casually in jeans so we look more like our members.”

The facility, designed in conjunction with Cornelia, Ga.-based storefront facilities consulting firm Financial Supermarkets Inc., also includes a more traditional teller line, two desks for the branch manager and lending officer and a 24-hour ATM vestibule.

“It's this warm inviting place in the community and it's only been three months but locals really like it,” said Faucher. “Not only is it more convenient for our existing members in that neighborhood but new members as well have commented how impressed they are with the space and that we're doing something unique.”

According to Mathes, the branch represents an opportunity for financial institutions to have a dialogue, upsell and deepen relationships with consumers and in the communities they serve.

“I'm a big believer that the branch offers the best opportunity to differentiate your brand,” he said. “You will never out-advertise a big bank and consumers try to avoid advertising that's why they binge watch shows, use Pandora, Spotify and satellite radio. So your branch allows you to create a unique experience from the credit union or bank down the street.”

Ultimately, the trend of successful branching boils down to greater brand alignment and recognizing that technology and merchandising can work together to help further stand out from the competition.

“Don't buy into the myth of the need for technology for technology sake, it leads to over-investing and overload. Technology on its own will not help you reach your goals, it has to support your business model and objectives,” said Mathes.

Read more: GTE Financial's community financial centers …

The $1.6 billion GTE Financial Credit Union's approach has been to create community financial centers, like the one pictured at left, that aim higher than the traditional branch transactional relationship by delivering on what its members want and need.

“We don't have branches but community financial centers,” said Brian Best, senior vice president of member experience and member solutions at the Tampa, Fla.-based credit union. “We use our facilities as financial education centers to build relationships not just do transactions.”

Many of GTE Financial's 21 community financial centers have been remodeled, will be reevaluated to ensure they are in the right place to engage with the community, and within the next two and a half years, traditional teller lines will be replaced with GTE OnScreen, its interactive teller machine.

Here's how it works: A GTE Advocate remotely located at its headquarters will appear on the screen to help members with traditional transactions ranging from making loan payments to transferring funds between accounts. Onsite member relationship and member experience officers at the centers can then focus on providing one-on-one service and attention to members.

The new space layout is designed to be more open, eliminate teller lines, and offer visitors an engaging and interactive retail-like experience, said Mandy Zurbrick, vice president marketing, about GTE Financial's newly redesigned downtown Tampa center on Ashley Drive that will serve as the prototype for future facilities.

“For us, the technology is just a tool to help members. We don't offer anything our members won't use,” said Best. “We want them to have the same experience in person as they do virtually.”

Instant Insights /

Brick-and-Mortar Branches Can Still Expand Brand Footprint

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